So I recieved an email from APMEX today. Holiday christmas is coming up! Buy pre-33 gold....this makes me wonder. In 1933 president Roosevelt ordered all US citizens to turn in all of their gold, except gold with numismatic value. Despite this, most citizens were very loyal and turned in all of their gold, even the more numismatic gold of the time. Despite this, how come pre-33 gold is so common today? If you go to APMEX for example, you can buy tons of certified gold by PCGS or NGC in any denomination. Obviously there is alot out there. A couple years ago I bought a 1901-S $5 PCGS MS62 half eagle there, which actually has a rather nice 'skin' to it. I'm satisfied with it. From what I've heard on the explaination on this, is some unscrupulous collectors or people would send then over to europe to sit in bank vaults until gold was legal again. Still, you would think most of the gold was melted down. This reminds me of the massive pre-1834 melting of gold. Prior to 1834, gold coins of the US mint had a higher gold content than our 900 fine gold today. They were actually .91 fine, the fineness of the gold sovereign. Because of this, people would melt the coins down for their precious metal content. Their intrinstic value was worth more than their face value. There was a massive meltdown, and this is one reason why pre-1834 gold is so rare. You would think this would apply to pre'33 gold too...but it seems alot more common. To combat the issue, the US mint in 1834 reduced the diameter slightly of the quarter eagle, and reduced the fineness from 916 fine on their $5 and $2.50 to around .89 fine. This allowed the coins to circulate and they were the first US gold coins to circulate widely. Because of this many classic head quarter eagles especially are in very worn condition. They don't start to become more rare until higher MS grades. So the question is, pre-33 gold seems common in comparison to pre-1834 gold. Why?
You're partially correct on the Europe part. But, most of that gold wasn't sent there by collectors. Germany borrowed many millions in gold after WW1 to pay off war debts for reconstruction, which it payed out to France and other countries. Much of that gold sat in vaults until well into the 60's and 70's, and who knows, a lot might still be sitting there now. This kind of illustrates gold's use during the years it was minted. It wasn't used so much by the average citizen, but rather as a means to trade internationally. Guy~
it is so common because it was used in foreign commerce and so foreign banks held it as a bullion reserve (when such a thing was required) and so it was spread out across Europe and stored there. Additionally, when the US rebuilt Europe following WWI and WWII we paid for that with gold in the form of pre-33 US gold coins. that gold was then sent to the central banks of the European nations where it was used to rebuild infrastructure and was then held by the banks as a bullion deposit. Finally the US started repatriating the coins and there has been a steady flow of them back into the US market resulting in the abundance that we have today.
As others have said, we sent much of it over to Europe in the first half of the twentieth century. However, there's more than that... Unlike pre-1834 gold 20th century (and late 19th century) gold didn't go through a gold price rise causing coins to worth more than face and therefore melted. Said another way, in 1933 all numismatic gold was removed from private hands, so therefore little melting of currently-circulating gold took place through the application of Gresham's law.
An interesting side note, and a possible source of pre-1933 gold coins is the "Moscow Gold" story. The Republican held Banco de España sent most of their gold reserve to the USSR in 1937 during the Spanish Civil War for "safekeeping" but also to pay for arms being purchased by their government. Allegedly much of the gold was in the form of US gold coin that had been acquired by the Banco de España from about 1900 forward. Even the Soviet authorities thought the better of melting the gold down, still keeping it in coin form. Apparently some of this gold coin is believed to have been funnelled out of the USSR secretly beginning in the 1980's.
I think another part of the story is that very few people assemble date/mintmark sets of gold coins, so there are more than enough around to fill type sets and single purchases.
